Fit versus fat retail

different, businessArguably the fittest man in Australia, if not the world, is my son-in-law.

He wakes daily at 5:05 am and trains from 6:00 am until 10:30 am rain, hail or shine. He doesn’t smoke, drinks very little alcohol and eats a diet of organic stuff. Sugar is a no no. The model of fitness you say and he is very happy. But surprisingly he is sick quite often. Usually flu like symptoms.

One of my close friends 20 years my son-in-law’s senior is grossly overweight, smokes a lot and drinks like a fish. Whenever he goes for a check up the doctors cannot find any problems. His heart is great, liver perfect and cholesterol couldn’t be better. He is happy and rarely is he sick.

Apply this to retail. Do you want to be a fit retailer or a fat retailer? There is no right or wrong answer but most successful retailers seem to fall into the fat category. They are not perfect. They take risks. They overbuy regularly. They slash prices when they are overbought. They take huge mark-ups whenever they can. When sales are sky high so are markdowns.

Show me a fit retailer and I’ll show you a lean mean machine with excellent metrics, perfect KPI’s and often mediocre results.

Show me a fat retailer and I’ll show you an exciting, risk taking merchant whose metrics are often out of line but who mostly makes profits second to none.

Generalisations galore, subjective and opinionated, yes. But hopefully this paints a picture.

Mr Parry was my menswear buyer. Every October we had a birthday promotion which wasn’t a sale but rather special offers, free gifts and so on. We used to buy in stock for the event. Mr Parry always had a sensational birthday promotion. He brought in tens of thousands of dollars of men’s suits. He never placed an order for these and when they arrived in receiving with no paper work, he would speak nicely to the receiving manager and promise to ‘fix it up later’. The supplier provided the goods on sale or return on a trust basis. They knew Mr Parry well and he used to sell a lot and return very little. Of course he eventually had to fess up and get an order signed which according to the fit rules, was an impossibility because there was never any open to buy available.

When he told his merchandise manager that the goods were already sold, there was little option but to have the order signed off. Mr Parry was a fat non-compliant highly successful retailer. I secretly wished I had a whole lot more like him but I could not admit this to a soul.

Most of the other buyers were fit. They obediently followed the rules and met their KPI’s. But it was Mr Parry who got the biggest annual increase.

Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at [email protected] or 0414 631 702.

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  1. Julian Josem posted on November 6, 2015

    I enjoyed your article very much. It actually raises issues that commonly arise whenever I am helping retailers assess their systems or developing specifications for how they want their systems to cooperate with the way they want to run their business. The best retailers I have worked with are innovative. Just like Mr Parry, they prosper DESPITE the systems and processes bean counters dictate. But these processes are generally put in place (justifiably) to keep mediocrity or newbies in check. There is a fine line between systemising to facilitate creativity within retailing operations and stifling it in order to keep management abreast of performance. There is no substitute for considered case-by-case analysis to determine what is best for the situation, and there is no place for glib one-liners like "fit retailing". I'd be interested to hear Brian Walker's response to your article. reply

  2. Stuart Bennie posted on November 7, 2015

    Thanks Michael. Your usual inimitable style !!! It's all a question of balance and judgement I guess. Yes the matrix/template approach is an embarrassment and yet some consultants still use it believe it or not. And if I read 'omni channel' again ........ For god's sake - that is last years buzz word.Or was it 2013 or perhaps 2012 ? How do customers fall for this nonsense ? reply

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